Why Virtual Power Plant (VPP) Adoption Must Accelerate
Image courtesy of mjmonty under Attribution 2.0 Generic Deed, resized to 700 x 391 pixels.
The Dept. of Energy (DOE) published a report that advocates for the accelerated development of virtual power plant (VPP) assets. The reason for this recommendation is that VPPs can be a relatively quick and easy way to boost reliability. In fact, the DOE sees these assets as a necessary element for future reliability in the U.S.
The Case for the Virtual Power Plant (VPP)
VPPs are aggregations of distributed energy resources (DERs) such as solar, electric vehicles (EVs), electric water heaters, smart buildings and their controls, and flexible commercial and industrial (C&I) loads that can help balance supply and demand by feeding the grid.
The report, entitled Pathways to Commercial Liftoff: Virtual Power Plants 2025 Update, is an update to the first ‘pathways’ report published Sept. 2023. The updated report reveals adoption trends, and although adoption is growing, the rate at which this is happening is too slow to move the needle.
The DOE set the ideal 2030 target for VPP capacity at 80-160 GW by 2030. As of the end of the past year, there was only 33 GW of VPP capacity in the U.S. In other words, it will take a miracle to reach the intended target.
That said, there are some things that can be done to spur VPP enrollment. One strategy is to educate people about VPPs, as many folks have no clue what these are. Another idea is to make it super easy for people to enroll in one. Or, better yet, force them to take action if they do not want to enroll.
This is exactly the model that Sunrun follows for CalReady, the largest single-owner VPP in the country, aggregating over 16,000 home solar and battery energy storage technologies. Sunrun essentially auto-enrolls customers, which requires them to opt-out if they do not wish to participate.
In the final analysis, with power demand expected to skyrocket in the near future thanks to the growth of data centers and other factors, expanding the country’s fleet of virtual power plant (VPP) assets can only help from a reliability perspective.
